Aidh

India, renowned for its industrial diversity and multifaceted economy, establishes and maintains a robust regulatory framework and comprehensive white-collar crime legislation to ensure a secure and dependable operating environment for businesses . Legislative advancements were implemented with the objective of combating financial crimes, strengthening enforcement, and ensuring corporations accountable for illicit activities.

WHITE COLLAR CRIME
The Prevention of Corruption Act, 1988 (POCA), which penalizes the actual or attempted promise or acceptance of an undue advantage in exchange for performing a public duty improperly or dishonestly, is the principal anti-corruption statute in India. It pertains predominantly to public servants. In its 2016 decision in CBI v Ramesh Gelli, the Supreme Court of India defined public personnel to include trustees of charitable trusts established to operate deemed universities and employees of private banks and deemed universities. In accordance with the Prevention of Corruption (Amendment) Act of 2018, commercial organizations are subject to the POCA. Consequently, the act of corporate entities, via their agents and third parties, offering bribery is classified as a distinct offence under the POCA. In an effort to deter money laundering, the Prevention of Money Laundering Act, 2002 (PMLA) grants the Indian government the authority to seize any property or earnings derived from unlawful proceeds. The PMLA specifies the procedure for adjudicating money laundering-related offenses and regulates the withholding or seizure of unlawfully acquired assets.

Legislative advancements were implemented with the objective of combating financial crimes, strengthening enforcement, and ensuring corporations accountable for illicit activities.

OTHER LEGISLATIONS
While certain legislation, including the Indian Penal Code, 1860 (IPC) and the Indian Contract Act, 1872, address different fraudulent offenses, the Companies Act 2013, establishes the notion of corporate fraud in India and grants authority to the Serious Fraud Investigation Office to examine accusations of fraudulent activity pertaining to corporations and their representatives. White-collar criminals are also charged under the IPC with a variety of offenses, including fraud and criminal breach of trust. Financial crimes are governed by a multitude of ancillary laws and regulations. These include the Central Vigilance Commission Act of 2003, the Prohibition of Benami Property Transaction Act of 1988, the Fugitive Economic Offenders Act of 2018, and the Black Money (Undisclosed Foreign Income and Assets and Imposition of Tax Act of 2015. Enterprises that maintain operations in foreign countries may be subject to the extraterritorial jurisdictional regulations of the host states, including but not limited to the United Kingdom Bribery Act (UKBA) and the Foreign Corrupt Practices Act (FCPA) of the United States.

FRAUD REPORTING

In specific circumstances, as outlined in the Companies Act, internal auditors are obligated to promptly notify the central government of fraudulent activities, provided that the quantity involved in the fraud does not fall below 10 million rupees. On 1 April 2021, the Companies (Auditor’s Report) Order, 2020 (CARO), issued by the Ministry of Corporate Affairs, implemented more stringent financial reporting obligations. These obligations include heightened due diligence standards, disclosure prerequisites for auditors, and increased transparency with regard to financial reporting and whistle-blower grievances. During the year under audit, the CARO now mandates that the auditor evaluate any whistleblower complaints received by the company. Additionally, the auditor is obligated to provide a report detailing any instances of fraud that have been detected or reported regarding the organization, either by or on behalf of the organization, throughout the course of the year.

In a statement of director responsibility, directors are obligated to provide information regarding the steps taken by the company to prevent fraud, as mandated by the Companies Act. Directors are obligated to provide a comprehensive inventory of the internal financial controls implemented by a listed company, as well as attest to their efficacy and adequacy in thwarting fraudulent activities and other irregularities. Enforcement agencies play a pivotal role in upholding the integrity of the financial system and assuring accountability for white-collar crime legislation in India. The enforcement directorate (ED), the Central Bureau of Investigation (CBI), and the Serious Fraud Investigation Office (SBI) have been granted investigative and regulatory authority to combat economic and financial fraud.


In the ongoing process of India enhancing its enforcement mechanisms and cultivating global collaboration, it is imperative that relevant parties maintain a state of constant vigilance and guarantee adherence to the ever-changing legal obligations.